Finance planning is related to the application of financial principles to monetary decisions of a consumer (e.g., an individual or a family unit) or a small business. Finance planning takes into account financial risks, goals, and future events in determining how the consumer or small business obtains, budgets, saves, and spends financial resources. Components of finance planning may include the monitoring and management of personal or business accounts established at financial institutions (FIs) such as bank accounts, investment accounts, retirement accounts, credit cards, consumer loans, business loans, and the like, but also other types of accounts like social security benefits, insurance policies, income tax-related accounts (like estimated tax payments), lines of credit, heath care savings accounts, micro-loans and person-to-personal loans, stored value cards, gift cards and, of course, cash.
Financial planning and budgeting may be performed with the help of accounting and/or financial planning software. For example, a user (i.e., a consumer or a person representing a business) may enter income, expenses, liabilities, and assets into an accounting program. The program may then query the user for a set of financial goals, as well as make recommendations regarding the user's choice of financial goals. The program may also generate one or more plans or budgets that enable the user to reach certain financial goals. Once the user has selected a plan, the program may also monitor the progress in carrying out the plan. For example, the program may analyze spending and provide automated alerts when spending exceeds the budget in a particular area and/or a particular time period. The automated alerts may be provided within the program or via email, short message service (SMS), or other messaging system. The program may further reassess the user's financial situation, progress, goals, and plan(s) over time and in light of events that financially impact the user.
To track the financial progress, the accounting and/or financial planning software may have online capability to download or otherwise obtain the financial information (i.e., FI-originated download data) from one or more financial institutions. The financial information may include account types, account balances, and/or any financial transactions associated with the respective accounts. Because the financial transactions are: (a) sometimes stored in a proprietary format by the financial institution; (b) usually only include partial information about a transaction; and (c) frequently take days to be processed and reflected within the FI's and its enabling partners' systems, the financial transactions may be difficult to obtain, understand and/or categorize, or the information may be delayed by several days. Consequently, the financial situation and/or budget progress of the consumer may be better assessed by processing financial transaction data by other means and/or obtaining additional information regarding the financial transactions themselves. Examples of accounting and/or financial planning software include financial management software, accounting software, tax software, healthcare software, insurance software, etc.
Techniques have been developed to track expenditures for financial planning purposes. For example, many financial institutions now routinely provide transaction information and statements, on paper or using paperless means (e.g., based on the open financial exchange specification or OFX), relating to transactions consummated using financial instruments (e.g., credit cards) issued to a user by the financial institution. In addition, techniques have also been developed for recognizing and categorizing transactions once certain data contained in a particular transaction record (e.g., payee name) is received by financial software.
Despite the development and advancement of various aspects of transaction tracking for financial planning, real-time feedback mechanisms regarding account balances and budget progress are not available to consumers and small businesses due to the lack of item-level details about a transaction (e.g., what exactly was purchased) and due to delays in processing transaction data by financial institutions. Furthermore, there exists no easy way to track and categorize cash transactions such as purchases made at a Point-of-Sale (POS) cash register using cash or cash equivalents.